Fight disinformation: Sign up for the free Mother Jones Daily newsletter and follow the news that matters.


I mentioned this briefly last night, but I want to highlight this short passage from Obama’s speech again:

I intend to hold these banks fully accountable for the assistance they receive, and this time, they will have to clearly demonstrate how taxpayer dollars result in more lending for the American taxpayer. This time, CEOs won’t be able to use taxpayer money to pad their paychecks or buy fancy drapes or disappear on a private jet. Those days are over.

Still, this plan will require significant resources from the federal government — and yes, probably more than we’ve already set aside. But while the cost of action will be great, I can assure you that the cost of inaction will be far greater, for it could result in an economy that sputters along for not months or years, but perhaps a decade.

The first paragraph starts us off with some excellent populist banker bashing.  You can almost feel the pitchforks and torches in the air.  But it’s just a carnival barker’s trick designed to misdirect.  In the second paragraph, delivered so quickly you could be forgiven for missing it, we get the substance: “This plan will require significant resources from the federal
government — and yes, probably more than we’ve already set aside.”

Bottom line: we intend to keep shoveling money into America’s big banks.  But we don’t really intend to get anything for it.

Here’s the best interpretation I can put on this.  Obama knows that he’s very likely going to have to nationalize one or more banks over the next few months.  But he also knows that talking about it openly is disastrous.  Like it or not, it just is.  So the only way for it to work is to deny, deny, deny right up until the day you stop denying.  Then you make a clean sweep: you take over whichever banks you need to and give the rest a firm, credible clean bill of health.  And everyone can get on with business.

Maybe this is wishful thinking on my part.  But I hope this is what’s going on.

Fact:

Mother Jones was founded as a nonprofit in 1976 because we knew corporations and billionaires wouldn't fund the type of hard-hitting journalism we set out to do.

Today, reader support makes up about two-thirds of our budget, allows us to dig deep on stories that matter, and lets us keep our reporting free for everyone. If you value what you get from Mother Jones, please join us with a tax-deductible donation today so we can keep on doing the type of journalism 2024 demands.

payment methods

Fact:

Today, reader support makes up about two-thirds of our budget, allows us to dig deep on stories that matter, and lets us keep our reporting free for everyone. If you value what you get from Mother Jones, please join us with a tax-deductible donation today so we can keep on doing the type of journalism 2024 demands.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate